© Bryan Garnier & Co.
Leaders League. To what extent has Bryan Garnier grown its media team over the last few years?
Robert Pfeiffer. Growth has happened in two ways. Geographically, with the addition of Cartagena Capital in Munich, bringing to the firm a team of experienced bankers with a deep understanding of the cross roads of technology and media and relationships in the digital media space in Germany, Austria, and Switzerland and across Northern Europe. End of last year we announced a strategic joint venture with JMP Securities, a US leader in TMT and biotech investment banking. This partnership has intensified our multiple client relationships and streams of transaction work across the pond, with a particular focus on west coast media and tech clients. We have added to our existing teams with key senior hires, above all my partner Guillaume Nathan joining our Paris office and leading the digital media effort with a string of transactions particularly in the digital advertising agencies space. We have also continued to strengthen our UK team with additional hires and the continuation of our strategic partnership with Stockdale Securities, the leading UK broker.
What are some of the challenges that the media sector faces today, and how does Bryan Garnier plan to work with its clients involved in this sector?
The media is living up to its name: when in the past we really thought about “medium,” by looking at each individual media channel, today these channels are all coming together and collapsing into one offering centred around digital media. Consumers find music, magazines, news, TV content, films, live entertainment, games etc. simply by clicking on their phones or Ipads. This has forced a wide range of media companies into competition with other forms of media that they had to date only seen as peripheral to their activity.
A second factor that affects and transforms all media is the dominance of Google and Facebook in digital media and their control over the profitability of any media distributed digitally. This has caused traditional media content owners and producers unparalleled value destruction and forced entire segments of the media industry to consolidate or even go out of business.
We believe that this tide of value transfer from the media companies to Google and Facebook is about to turn. Content will regain (some of) the clout it has traditionally had as Google and Facebook find audiences starting to reinstate their demands for quality content (instead of Youtube videos made in a teenager’s basement room), reliable information (instead of manufactured news) and protection against extremist content (as recently witnessed in the scandals affecting Youtube and Facebook). Money will follow eyeballs and eyeballs follow content. This will lead to a revaluation of media content owners and producers the world over. Our task and responsibility is to advise media companies on how to make the most of this value opportunity by gaining access to capital for growth, acquisitions and the transformation of old business models. This is a truly global trend and transactions and capital will be found internationally. With our global reach and our deep understanding of local market dynamics we are uniquely placed to support our media clients during these transformational times.
Leaders League. What are the characteristics a media company has that show it has investment potential?
R.P. Media companies offer a range of attractive investment opportunities: from the low risk, reliable cash flows of a music publishing company to the exciting and rapid value explosion of a digital games company, there is any combination of risk/return available to investors. To succeed in the digital age, all media companies need to master mobile content delivery. This is not simply a technological challenge, but at its heart a content creation competency. A radio company needs to understand when its listeners will tune into what type of music and in what environment they will at that moment in time find themselves – on their way to work, in the gym, relaxing at home etc. The radio station that understands the context of its listeners’ consumption will be able to have the right content ready for that very moment, will make it available in as attractive and accessible a format as possible and will find an economic model that produces the best return on its investment (e.g. subscription, streaming, ad-based, sponsored etc…). The best media companies will work out revenue opportunities linked to the audience’s media consumption habits, the individual person’s life situation and the purchasing decisions that follow from that. Combining entertainment with personal data and location is a very powerful tool in creating profits.
Has Brexit affected your work or your clients? If so, how?
The impact of Brexit was noticeable in 2016 as investment decisions, IPOs etc., were held back as decision makers needed to work out what Brexit would mean for them. In 2017 we see a new-found optimism by business leaders and financial markets that politicians will eventually reach sensible economic arrangements. The reality of this process taking many years and the high likelihood of an interim arrangement between the UK and the EU add to the confidence that no harsh changes will affect business conditions in the UK and continental Europe.
More on Bryan Garnier & Co:
Interview with Carter Mack (President, JMP Group)
Interview with Nicolas d’Halluin (Partner, Bryan Garnier & Co, US)
Interview with Falk Müller-Veerse (Partner, Bryan Garnier & Co, Germany)